1. Entries for Bonds Payable and Installment Note Transactions The following transactions were completed by Montague Inc., whose fis- cal year is the calendar year: Year 1 Issued $6,070,000 of five-year, 7% collable bonds dated July 1, Year 1, at a market (effective) rate of 9%, receiving cash of July 1. $5,589,697. Interest is payable semiannually on December 31 and June 30. Borrowed $430,000 by issuing a 10-year, 6% installment note to Intexicon Bank. The note requires annual payments of Oct. 1. $58,423, with the first payment occurring on September 30, Year 2. Accrued $6,450 of interest on the installment note. The interest is payable on the date of the next installment note Dec. 31. payment. Paid the semiannual interest on the bonds. The bond discount amortization of $48,031 is combined with the semiannual Dec. 31. interest payment. Year 2 Paid the semiannual interest on the bonds. The band discount amortization of $48,031 is combined with the semiannual June 30. interest payment. Sept. 30. Paid the annual payment on the note, which consisted of interest of $25,800 and principal of $32,623. Accrued $5,961 of interest on the installment note. The interest is payable on the date of the next installment nate Dec. 31 payment Paid the semiannual interest on the bonds. The bond discount amortization of $48,031 is combined with the semiannual Dec. 31 Interest payment Year 3 June 30. Recorded the redemption of the bonds, which were called et 98. The balance in the band discount account is $288,181 after payment of Interest and amortization of discount have been recorded. (Record the redemption only.) Sept. 30. Peid the second annual payment on the note, which consisted of interest of $23,843 end principal of $34,580. Required: 1. Journalize the entries to record the foregoing transactions. For com- pound transactions, if an amount box does not require an entry, leave it blank or enter "O". When required, round your answers to the nearest dollar. Date Account Debit Credit Year 1 July 1 Cash Premium on Bonds Payable Bonds Payable Oct. 1 Interest Expense Dec. 31-Note Dec. 31-Bond Year 2 June 30 Sept. 30 Dec. 31-Note Dec 31-Bond Year 3 Indicate the amount of the interest expense in (a) Year 1 and (b) ar 2. Year 1 $1 Year 2 $ Determine the carrying amount of the bonds as of December 31, ar 2